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March 2022: SEC Issues Two Whistleblower Awards, Totaling $17.5 Million In Financial Compensation

Securities fraud remains a major area of concern. The SEC is the federal agency responsible for regulating securities markets and taking enforcement action against investment fraud. One of the challenges facing the SEC is that investment fraud is often well-concealed. For this reason, a whistleblower program was created to incentivize insiders to come forward and help stop fraud.

As the SEC whistleblower program closes out its first decade, the agency has now awarded more than $1.2 billion in financial compensation to whistleblowers. That number includes $17.5 million in compensation in March of 2022. In this article, our Miami investment fraud lawyers highlight some of the key details for the two most recent securities industry whistleblower awards. 

SEC Whistleblower Award: $3.5 Million in Financial Compensation 

On March 8th, 2022, the Securities and Exchange Commission announced that more than $3.5 million in financial compensation is being awarded to a whistleblower. The anonymous whistleblower in question voluntarily came forward and provided important information that helped the agency take successful enforcement action in two separate matters. The information provided was material to the matter and likely would not have been discovered in another way.

Notably, the SEC states that the disclosures by the whistleblower not only helped to prompt the initial investigation, but they saved time and resources by giving the agency a roadmap. The two matters at issue in this whistleblower case “arose out of the same nucleus.” As the whistleblower’s voluntary information was a key part of both enforcement actions, the individual was entitled to compensation related to each of the two matters. 

SEC Whistleblower Award: $14 Million in Financial Compensation 

On March 11th, 2022, the Securities and Exchange Commission confirmed an award of approximately $14 million for a whistleblower who provided crucial information to the agency. In this case, the whistleblower in question voluntarily published a report online exposing alleged investment fraud. The report was comprehensive. It contained extensive documentation, well-considered analysis, and conclusions regarding securities law violations.

On the same day that the report was published online, the whistleblower actively reached out to the SEC and shared the information directly. According to the SEC’s order for a whistleblower award, the individual was “persistent.” That persistence paid off for investors. Their report prompted an official investigation by the SEC and, eventually, successful enforcement action. Due to the whistleblower’s disclosures, millions of dollars were returned to affected investors.

Schedule a Confidential Consultation With a SEC Whistleblower Lawyer

At ​Carlson & Associates, P.A., our South Florida whistleblower attorneys are devoted to protecting the legal rights, financial interests, and confidentiality of our clients. If you are considering disclosing information to the SEC and you want to find out more about the whistleblower process, we are available to help. Reach out to our Miami law office today for a fully private consultation. Our securities law attorneys are able to provide SEC whistleblower representation throughout Florida.

Resource:

sec.gov/news/press-release/2022-38

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